S&P 500 Channel Breakdown Projects a 50% Retracement of the February Rally

The apparent ineptitude of British pollsters and the failure of institutional market participants to be properly positioned ahead of the Brexit vote sent world markets into a tailspin today. Just yesterday the S&P 500 was at the top end of its three month trading channel and poised to breakout to new all-time highs, but then in one session it collapsed back down to the lower end of that range, and is now threatening to take out support.

If channel support is breached the pattern projects a target price measured by taking the height of the channel and subtracting it from the support line. It suggests a return to the 1960 area which is a 50% retracement of the rally of the February lows.